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VICTORIA. general market. And least of all was it intended that their pastoral occupation should stand in the way of the development of general population and industry, and of those facilities for the acquisition of land by the public at large which are essential to that development.

8. If the language of the Order in Council goes beyond these intentions, and if that language, coupled with the acts done under it, has conferred vested rights to an extent beyond what was at all foreseen, and now felt as a practical inconvenience, a very serious question undoubtedly arises between private claims and the general interest. I will not say that in an extreme case the latter must not prevail, and that vested rights must not give way, subject to such compensation as it may be practicable to give.

9. But I am not satisfied that it is necessary to resort to measures of this nature. It requires to be first considered whether the existing powers of Government will not suffice at once to maintain the intended principle, and to repress the abuse. If the occupants insist on the extreme view of their rights as controlling the obvious meaning of the concessions made to them, it becomes incumbent on Government to protect the public by insisting also on the rigorous interpretation of the Order in Council when its provisions may seem to clash with the public interests.

10. Now the equitable rights of the occupants, on the strictest view, are also I think fully stated in your Despatch. I need only very briefly recapitulate those on which the questions now submitted to me turn. They appear to be entitled to demand leases, under the conditions respectively specified as to intermediate and unsettled lands, to be executed whenever it is possible for Government to take the necessary measures, for terms not exceeding eight and fourteen years respectively. They are entitled to a right of pre-emption when lands are put up for sale at the end of each year of lease, in the intermediate of the last year, in the unsettled districts. They are entitled to an exclusive right of purchase in the unsettled districts, whenever Government thinks fit to sell them land during the currency of the lease; and they are entitled to renewal under the conditions specified in Section 16 of the Order in Council.

11. The limits to those rights, on the other hand, appear to be these, judging as I am compelled to judge only from the Order in Council itself, and subsequent legal documents issued by the local Government; for it is impossible that I can fully appreciate the modifications which usage or understanding, recognized both by Government and the occupants may have introduced in the colony.

12. In the first place, as the occupants have been treated in all respects as lessees since the Order in Council was acted on in the colony, any lease granted must fairly be considered as dated only from that period. This, 1 understand, to be the view of the Legislative Council, in which I fully concur. The date on which I understand them to have fixed is the 7th April 1848, to which I see no objection.

13. In the next place, the Order in Council promises these leases only for terms "not exceeding" eight and fourteen years respectively. The squatters indeed appear to contend that these words are to be taken contrary to their plain import, as conveying a promise for the full extent of these terms. And I do not collect from any of your Despatches the expression of your own views on this very essential point. Mr. Forlong, I observe, contends that the claimants in the unsettled districts have a positive guarantee for fourteen years absolute. I can only say, that the most diligent examination of the papers has failed to show me any such guarantee. It cannot be seriously contended for a moment that a casual expression in the Despatch of Lord Grey, transmitting the Order in Council, (on which I see some reliance is placed,) taken also apart from its context, had the effect of adding to or altering the definite words of an Order in Council. And could this be maintained, it would be easy to show, from his Lordship's own subsequent Despatches, that he did not himself so interpret the Order. In a Despatch addressed to Sir Charles Fitzroy, on 6th August 1849, he says: "But inasmuch as the Order of 9th March leaves the

length of the term of years to be granted entirely at your discretion, you "will be able and justly entitled to refuse to such persons any lease for more "than a year, unless they are willing to accede to the insertion of the condi"tions which you may require."

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14. It is hardly necessary to add, that as the occupants are now in the enjoyment of the full benefit of leases without possessing them, so they cannot

justly claim that the term of lease to be ultimately allotted to each, whether fourteen years or less, must run from the actual issue of such lease. The antedating of the lease will be strictly equitable, inasmuch as they have hitherto had the same equitable advantage as if it had so been issued.

15. In the next place, although the lessce in an unsettled district has an exclusive right of purchase (subject to what I shall have presently to say on the head of reserves) during the currency of his actual or assumed lease, I find no provision in Section 6 compelling the Governor to sell such lessee any land on his demanding it.

16. Nor do I find any provision in Section 15 or elsewhere compelling the Governor to put up land for sale at the expiration of each year in the intermediate districts, or of the lease in the unsettled districts, nor any provision continuing the right of pre-emption to the occupant at any future sale, when the Governor shall not have sold immediately on the expiration of the lease, and the lessee shall not have renewed or shall have been prevented from renewing by an alteration in the class of his land. And it must be added that, considering the great difficulties which you point out as attaching to the system of sale by valuation, it would be obviously unreasonable to suppose that the Governor was compellable to exercise those powers of sale when the public interest did not require it, merely in order to enable the lessee to exercise his exclusive or pre-emptive rights, those rights having really been given him only with a view to prevent interruption by others, not as a means of gain to himself.

17. In the next place, Section 9 of the Order in Council gives the power of making grants or sales within the runs, and without any regard to exclusive or pre-emptive right in the lessee, for many specified public purposes, (including the purpose of digging for minerals, which may be of great importance in the present situation of the colony); and, lastly, "for otherwise facilitating the government and settlement of the colony." Without entering at length into the controversy to which these words have given rise, it is enough for me to say that the very differences of opinion which have existed among lawyers as to their exact construction entitle you, in my opinion, to put on them the more liberal one as regards the requirements of the public. If this construction be legal, and I have no reason to doubt it, it is plainly that which ought to be adopted, both for the public advantage, and also with a view to the equitable redemption of the promises, and no more than the promises, intended to be made to the occupants themselves. It was intended to prevent land comprised in their runs from being sold by Government to parties purchasing for mere speculative purposes, and, at the same time, to enable it to be so sold (without regard to the lessee's right of exclusive purchase) where the public necessities of the colony were such as to require it. When, therefore, you are of opinion that the progress of population and settlement in a particular quarter has rendered it matter of public importance that enough land should be made available for the agricultural supply of the wants thus created, you may, in my opinion, sell land to that extent under the general sale regulations of the colony, though situated within a run.

18. And lastly, I consider it plain that Her Majesty's Government have the power to make rules respecting the division from time to time of the land into settled, intermediate, and unsettled districts, by Order in Council. And considering the great change in the circumstances of Victoria, it is obvious that the time has arrived for a liberal exercise of that power. I am not indeed certain (but prefer on such a point to be guided by local experience) whether an entire abolition of the "unsettled class," and a very wide extension of the "settled," leaving only the more distant portions as intermediate, would not be the best course. I shall therefore so delegate the necessary powers to the Governor as to leave him absolutely free in this respect. The effect of such an extension would of course not be to interfere with subsisting leases (whether actually granted or promised, and therefore assumed to exist), but it would, as it appears to me, destroy all right of renewal, except subject to the terms applicable to the class in which any run might by the change become included.

19. These are the powers which appear to me to be vested in Government, consistently with the equitable and literal engagement to the occupants, as far as they are to be collected from the Order in Council. But here the great difficulty, to which I have referred at the outset of this Despatch, meets me at I cannot collect, even from the mass of documents before me, how far

once.

VICTORIA.

VICTORIA.

the interpretation which I have put on these powers may be modified by the subsequent acts, or declarations, or tacit assent of the local Government, so as to give place to an interpretation more favourable to the squatters. The mere assertion of the latter I cannot of course take for granted. And I am fully aware, in cases of contract between Government and individuals, or classes of individuals, how easily a more favourable view of each provision towards the private person, and less favourable to the Government, becomes current in common expectation; how watchful individuals are in extending their rights by implication and construction, and how little interest, comparatively, those who represent the Government have in resisting such extension. The only rule I can furnish you with is this: that where a construction more favourable than what I have laid down rests only on some vague and general understanding, current among the classes benefitted, it may be altogether disregarded; nor can any loss incurred by individuals through the non-recognition of such an understanding be considered as establishing a right to compensation. But where such construction is so far supported by acts or declarations of the local Government as to appear sanctioned by a pledge of the public faith, these individuals are entitled either to its maintenance, or (if this be impracticable) to reasonable compensation. I am aware that in laying on you the duty of distinguishing between these supposed cases, I impose a task of difficulty and delicacy, but it is unavoidable.

20. With regard to the duration of leases in particular, I have been led, partly by your silence on the subject, and partly by other circumstances, to infer that the claim of the squatters for leases of maximum duration, though contrary to the plain words of the Order in Council, may nevertheless have derived some force from the acquiescence of the local Government. If this is really the case, although I think it much to be regretted, my instructions must be regarded as open to some modification in partial recognition of a claim thus substantiated.

21. Subject to these cautions, I have to authorize you to employ the various powers which, according to these views, belong to the local Government, as far as you may consider advisable; and I cannot but consider them as amply sufficient to ensure to the community at large an adequate supply of available land, without infringing on the real rights of the squatters.

22. But with regard to these latter, it is by no means the wish of Her Majesty's Government that they should be placed in real difficulties, or their well-founded expectations-expectations, that is, limited within the purpose for which these advantages were first given them-disappointed. I recognize to the fullest extent the great value of which their industry has hitherto proved to the community, and believe that whatever may be the development of the colony under its present altered circumstances, pastoral pursuits will still furnish the most profitable and useful occupation to a considerable portion of the inhabitants. My only object is, that the extensive privileges which have been accorded them may not be perverted by too literal claims to purposes for which they were not intended, and may not be exercised with manifest unfairness to other classes. It is to prevent this abuse that I have thought it necessary to point out that if the rights of the Crown are insisted on with equal strictness the use of those privileges will be very materially curtailed.

23. If, therefore, any occupiers of runs should apply for leases, and should be content to receive leases exempt from those conditions which are at once injurious to the community and useless for merely pastoral purposes, you are fully authorized and desired to grant them. Such leases should contain no power of exclusive purchase during the term, or of pre-emption at the end of it, except with such limitations as should clearly confine such power to land really wanted by the lessee for those purposes of homesteads and bona fide improvements, which are specified in paragraph 65 of your Despatch, which appears to me to contain a reasonable definition of pre-emptive right. They should also be subject to the power of the Government to resume from time to time, and offer for ordinary and open sale, after sufficient notice, land, which may be really wanted for that purpose in the judgment of those in whom the control of the public lands is vested.

24. To those who may prove willing to accept this offer, making thereby a concession of extreme rights, I would authorize you in return to make all reasonable concessions on the part of Government, As to the duration of their

leases, for instance, I would leave you full discretion to the extent of the maximum given by the Orders in Council, but dating the lease from the 7th April 1848, as recommended by the Legislative Council. As the difficulties. of accurate survey will no doubt continue for some time longer, I would leave you at liberty either to issue leases with such general description of boundaries as the lessee may be content with, and (with the consent of the Legislative Council, if necessary), so to confirm these boundaries as to secure the lessee from any encroachment on the part of Government, leaving, of course, the rights of third parties inter se, &c.; or if the lessee preferred it, he might be allowed. still to remain on the footing of an occupier, possessing an equitable title to a lease until this could be executed with that more absolute precision which a survey would afford. I will not go further into particulars which must be far better understood on the spot, but only repeat my general instruction that additional security and advantage to those who are willing to take the leases for bonâ fide pastoral purposes, and free from the objectionable conditions, will be a very fair purchase for the surrender of a portion of their present claims.

25. With regard to the substitution which you propose of an assessment on stock for present rent, I entertain some doubts whether much advantage will in reality be gained by such a measure; but it is one on which I am quite ready to adopt the views to which your own local experience has led you.

26. Lastly, if there be any parties who would prefer to surrender the extreme rights of which I speak for other compensation, or to whom injury may really be done by the disappointment of just expectations which enforcing the powers of Government may occasion, it appears to me that both the land of the colony (should the provisions of the present Waste Lands Act be modified) and its public funds might be very fairly resorted to for the purpose of affording such compensation; and Her Majesty's Government would readily afford any assistance in their power towards it, on being moved to do so by address from the Legislative Council.

27. As to the manner in which the necessary measures are to be carried into effect, I have been reluctant to advise the exercise of the Queen's power of legislation by amending the present Orders in Council, because it appears to me desirable to try the effect of further arrangement and mutual understanding before resorting to any measure which might be construed as a legislative invasion of vested rights. I have also considered that under the engagements now subsisting between Her Majesty's Government and the people of Victoria, all the provisions of the Waste Lands Act will (as before said) probably soon come under the revision of Parliament, when this particular portion of the subject can be more satisfactorily treated in connexion with the rest. I prefer, therefore, waiting for a further report from yourself, and using such power as may remain to the Crown, or be placed by Parliament at its disposal, to give validity to any measures which you (with the advice of your Executive Council) may have adopted under those circumstances.

28. I am ready, however, to cause to be prepared two short Orders in Council, the one empowering the alteration of the limits of the district, the other to enable you to substitute an assessment of stock for rent; neither, however, to have any force in the colony until publication there, the time of which will be left to your discretion. But as these orders must necessarily be laid before Parliament, which is not yet in session, some time must elapse before you can receive them, and it is possible that some intervening information from yourself may render them unnecessary.

29. I will not lengthen this Despatch further than by expressing my sincere hope that this very difficult and pressing question may be fairly adjusted, whether through the use of such means as are here placed in your power, or (which would be much more satisfactory to myself) by mutual concessions and arrangement in the colony. In this way only can the necessary progress of settlement, and the just demand of the increasing population for facilities in acquiring land, be reconciled with the preservation of that important interest whose claims are now under review.

I have, &c.

Lieut.-Governor La Trobe,

&c.

&c. &c.

(Signed)

NEWCASTLE.

VICTOR IA

VICTORIA.

No. 3.

Melbourne and

Hobson's Bay Railway Company, Jan. 20, 1853.

Geelong and Melbourne Railway Company, Feb. 8,

1853.

Nov. 10, 1853.
Aug. 25, 1853.

Encl. 1 in No. 3.

Downing Street, December 20, 1853. I HAVE to inform you that having laid the three Acts of which the titles and dates are specified in the margin, before the Queen, Her Majesty has been pleased to allow the same.

You will accordingly communicate Her Majesty's decision to the inhabitants of the colony under your government by a proclamation to be published in the Melbourne, Mount usual and most authentic manner.

Alexander and Murray River Railway Company

Feb. 8, 1853.

(No. 134.)

SIR,

No. 3.

COPY of a DESPATCH from the Duke of NEWCASTLE to
Lieut.-Governor LATROBE.

Although I have thus advised Her Majesty, in pursuance of the general principle that Acts passed by a colonial Legislature and containing no provisions affecting Imperial interests are not to be interfered with by Her Majesty's Government in this country, unless on the strongest grounds-I cannot omit this opportunity of expressing my regret at the apparent profusion with which public assistance has been rendered to these schemes, and the very loose character of the control which the Legislature has thought proper to reserve over them to the local government. However desirable it may be to encourage enterprises of this description, I fear that these measures do so at the cost of much probable future embarrassment.

I transmit to you copy of a report from the Board of Railways, and the extract of a report from the Commissioners of Land and Emigration on the subject of these Acts, which will more fully explain my meaning.

I have also to convey to you the sanction of this Department, and of the Lords Commissioners of the Treasury, for the dealings with the Crown lands and with the reserved moiety of the land fund, which are contemplated by these enact

ments.

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I AM directed by the Lords of the Committee of Privy Council for Trade to acknowledge the receipt of your letter of the 6th of October, enclosing copies of three Acts passed by the Government of Victoria, entitled respectively, "An Act to incorporate a Company to be called the Melbourne and Hobson's Bay Railway Company," (assented to, 20th January 1853). "An Act to incorporate a Company to be called The Melbourne, Mount Alexander and Murray River Railway Company," (assented to, 8th February 1853), and "An Act to incorporate a Company to be called The Geelong and Melbourne Railway Company," (assented to 8th February 1853), and also extracts from the Despatches of Lieut.-Governor LaTrobe, and other documents relative to the above-mentioned Acts; and I am to acquaint you in reply, for the information of the Duke of Newcastle, that agreeably to his Grace's request conveyed in your letter, their Lordships have proceeded to consider those Acts, and have made the following remarks on the subject of their provisions.

The attention of their Lordships has, in the first instance, been directed to the questions adverted to in the Governor's Despatch of the 15th March 1853, with respect to the manner in which it is proposed that the aid of the Executive Government of the colony should be afforded to the projects of these railway companies. 1. By the grant of portions of the Crown lands. 2. By a guarantee of interest on the funds advanced for the construction of the railways, and 3d. by immediate advances of money towards the expenses of the preliminary surveys.

The question of the proposed grants of Crown lands is one hardly falling within their Lordships' department to consider, and their Lordships would merely observe that, as it appears to be the intention to limit the grants strictly to land required for the line, stations and termini, they are not open to the objections which on some other occasions have been stated in reports from this Department, with reference to more extensive grants of land to railway companies in the colonies.

The guarantee of interest is proposed only with respect to the Melbourne, Mount Alexander and Murray River, and the Geelong and Melbourne Railways; certain reasons alluded to in the Governor's Despatch having prevented the adoption of the same course

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